Identifying Loan Scams: Are You Being Scammed in Finding a Loan?

If applying for a loan online, be careful who is accessing personal information. There are scammers who set up fake websites and create applications for loans in order to scam people out of their money on the pretence of getting a loan. The people most commonly targeted for this are those who are already having problems getting loans though conventional means.

Some of the Initial Warning Signs of Loan Scams

Ignore anything that looks like spam. It probably is and is likely a fraudulent offer. However, if the email is addressed directly to the sender and does not look like spam, still examine it carefully. Firstly, if there are any issues with the language and grammar, this is a flag. A professional (or even a serious investor) will make certain that the language is proper and formal, in most instances. There will not be grammatical or spelling errors. Also examine the response address. Anything claiming to come from a bank will use the bank’s proper email, not a Yahoo or gmail account.

Beware of links in emails. These are often disguised and misleading, and can even be deceptive by having a name very similar to an actual bank or financial institution. There is one scammer that even uses the name of a German bank in its URL, and if the name of the bank is searched, then the actual site of the bank shows up and is very obviously different. A .net extension could also be a clue, as most legitimate lenders will use either .com or a country extension, such as .de (for Germany).

Other warning signs are getting multiple copies of the same email; emails that come from known scamming places, such as Nigeria (or appear to Nigerian, but claim to come from another country, such as the UK).

How the Loan Scams Work

The idea behind these scams is to get money from the person being scammed. This is usually done under the pretence of application fees. Please be advised that no legitimate loan company will ask for the application fees up front. With a legitimate loan there will be several forms to fill out first, the conditions will be agreed upon up front, there should be review of all items by both parties, and there will also be to possibility of legal review, without complaint, by either party involved.

To avoid the chance of being scammed, always review everything as much as possible. Make certain that any agreements signed are reviewed by an impartial third party at the very least, but ideally by a legal representative who has the best interests of the party receiving the loan at heart. And never, never send any money before having the entire agreement reviewed and accepted. Especially through Western Union or similar agencies.